London 10.09.06 | One issue that has somewhat escaped the attention of LatAm opinion makers, political analysts and observers is a supra constitutional mechanism known as the National Constituent Assembly (NCA). Incumbents call for a referendum, whose aim is the formation of a NCA, that in practice dissolves all democratically elected powers and appoint new ones. Venezuela provides a perfect case study of how such mechanism came about and the pernicious effects that it has on democracy, and above all else, on the premise of independence of powers. Hugo Chavez was the first democratically elected leader to have used such a method to install his cronies in power and purportedly to "refound the State."

Having won an almost absolute majority in the NAC called for in 1999, Hugo Chavez's minions effectively did away with all elected officials and institutions, going as far as drafting and passing a new constitution that gave extraordinary powers to the head of the executive. Please do note that the previous constitution, approved in 1961 which was still in effect in 1999 when these events took place, did not have any provisions or other such statutory regulations permitting to form any supra constitutional entities. In fact it was a 'democratic' coup d'etat -probably a first anywhere in the world- for Chavez sought to armour plate his NCA by arguing that it was summoned by 'the will of the people.' Ergo Chavez, disregarding constitutional mandates existing at the time, completely revamped the State to suit his specific political agenda. Presidential re-election was introduced in the constitution, the presidential period was extended from 4 to 6 years, in sum on 22 December 1999 Chavez's NCA -a week before the new Constitution was enacted- decreed a 'transition regime' which ceased the functioning of Congress, legislative assemblies and all other public powers. Then, arguing that the new Constitution had yet to take effect (it had been approved already five days earlier in a referendum on 18/12/99) it created a National Legislative Committee, named the new members of the Supreme Court, the people's Defender, the Attorney General, the National Electoral Commission and the Comptroller. In none of these cases were the procedures established by the new Constitution followed.

That single act did away with the legitimacy of the Venezuelan State as it stands today for in unconstitutional fashion, the independence and democratic origin of powers were impinged. There was no public consultation on the subject whatsoever, the customary parliamentary debate and consensus needed to reach such transcendental decisions were totally obviated. Thus we saw how Chavez illegally abrogated the former constitution and bestowed upon himself extraordinary powers to govern Venezuela. That has proven to be his ultimate political masterstroke.

Emboldened by Venezuela's huge oil income, which Chavez commands unrestrictedly, he nowadays is exporting his try and tested method to weak democracies around the region, in particular to Andean countries. Ollanta Humala wanted a NCA, Chavez puppets in Ecuador -Roldos and Correa- want one, AMLO fancies another and Evo Morales is already half way to 'refounding' the Bolivian State.

In my recent trip to Sao Paulo I warned democrats from Brazil, Argentina, Ecuador, Colombia and Bolivia about the perils they faced should this democratic aberration devised by Chavez and Castro hold sway. It seems difficult for citizens of those countries to envisage what the future may be under such conditions. As a Venezuelan who knows exactly where that road leads I can only continue warning them and hoping that the model will be rejected at all costs.

Reports out of Bolivia point at fierce resistance to the Morales-sanctioned Chavez travesty. In Santa Cruz, Beni, Tarija and Pando provinces people are up in arms and should continue so until Morales' backs off. To do otherwise will simply mean a transfer of power to Caracas and Havana.

SANTA CRUZ, Bolivia -- Racial and economic tensions tearing at the social fabric of Bolivia have been laid bare by a general strike on Friday that sparked violent clashes and paralyzed the eastern half of the country.

"We are very close to a separation of the two regions of Bolivia," said Ruben Dario Cuellar, a deputy for the conservative Podemos party, which accuses President Evo Morales of trying to force through a new constitution that would institutionalize an indigenous socialist state.

All commerce and transport halted during the daylong work stoppage called by opposition leaders and regional governors in the four eastern provinces that produce 60 percent of Bolivia's economic output.

Pro-government groups trying to break the strike clashed in several eastern cities with members of civic and militant youth organizations that favor regional independence for Bolivia's wealthiest provinces.

Mr. Morales accused his opponents of seeking to "sabotage" the constituent assembly in which his Movement to Socialism (MAS) party has a majority of delegates. He also called the strike "racist" and said the opposition wanted to "humiliate the original indigenous people of Bolivia."

But Mr. Cuellar said the country is "divided between two visions. The west wants to take us back a thousand years to a savage primitivism while the east wants to move toward the future through a culture of free enterprise."

MAS scored barely a quarter of votes in Santa Cruz, Beni, Tarija and Pando during recent balloting, in which the four eastern departments voted overwhelmingly for regional autonomy.

Mountainous western Bolivia strongly backed the central government, but fell short of delivering the two-thirds majority required to force constitutional changes that would restrict private enterprise and empower a peasant-controlled "council of original peoples."

The assembly fell apart when opposition leaders protested rulings by MAS Assembly President Sylvia Lazarte, a Quechua coca farmer, that would allow key clauses to be approved by a simple majority.

The conflict is also marked by racial animosities. Eastern lowland "cambas" are a mix of European whites and Guarani Indians. The western Andean region is mainly composed of Quechua and Aymara Indians.

Santa Cruz civic leader German Antelo warned at a weekend press conference that the opposition will adopt "further measures" if the government does not give in to regional demands.

"They have until Thursday to agree to our conditions for restoring two-thirds majority and recognize regional autonomy," he said.

The coordinator of civic committees, Mariano Aguilera, says that eastern Bolivia is going to hold its own constitutional assembly.

"If they want their Aymara nation in the west, let them have it. We can write our own constitution here in the east," he said.

1242 GMT -- BOLIVIA -- The governors of six of Bolivia's nine departments broke relations with President Evo Morales Nov. 19, claiming he has violated regulations regarding the currently convened Constitutional Assembly. The move is a response to Morales' Nov. 17 declaration that the assembly can pass individual clauses by a simple majority, obviating the need for compromise between Morales' party and the opposition. www.stratfor.com

Bolivia is locked in a struggle for its future between its largely indigenous western highlands and the more Europeanized lowlands. The turmoil threatens all three of its main export sectors in varying degrees.

Analysis

The struggle between Bolivia's highlands and lowlands threatens to disrupt all three of its main export sectors -- some more than others.

President Evo Morales' center of power lies in the eastern highlands, which are populated by indigenous people who make up roughly two-thirds of the country's population. The opposition's power base lies in the western lowlands. The lowlanders, who are largely of European descent, generate more than two-thirds of the Bolivia's wealth, although they only make up about one-third of the population.

Nearly all of the country's exports are generated in the lowlands; the exports fall into three categories. First are Bolivia's natural gas exports, which are transported via two pipelines. One pipeline supplies Brazil exclusively, while the second supplies Argentina and Chile. Second are various minerals, largely zinc, iron ore and tin. Third are agricultural products -- mostly soybeans -- that are sent to the nations of South America's southern cone. Most of the highland population practices subsistence farming, and Bolivia is actually a net importer of foodstuffs despite the lowland soybean exports.

The ongoing instability in Bolivia's political system could disrupt all of these export sectors. The least vulnerable of the three categories, ironically, is the mines. While most of the mines are located in the highlands, where various indigenous protests regularly interrupt shipments, the mines are not the subject of the political dispute. Operations there might not be ideal, but there is no change on the horizon, no matter how far things degrade in the highland-lowland equation.

Natural gas falls in the middle in terms of risk. Morales' constitutional reforms aim to harness most natural gas export income for the central government -- something that would disenfranchise the lowlands economically. While no one in Bolivia wants to see the natural gas flows stop, nearly all of the country's natural gas fields are precisely where the highlands slope down into the lowlands -- exactly where the two sides would clash if the situation degrades into fighting. Such a shift would threaten exports to all three of the southern cone states equally. Bolivia exports 2.4 billion cubic meters of natural gas per year to Argentina -- with some of that flowing on to Chile -- and has the capacity to ship 10 billion cubic meters annually to Brazil, although Brazil typically imports only about half of that amount.

In the long term, however, while disruption is a looming probability, whoever ends up on top will still have an interest in exporting the natural gas. The real question for Bolivian energy is, will anyone still want it? All three southern cone states are making efforts to eliminate their need for Bolivian natural gas -- not only because of the political chaos, but also because of Morales' recent nationalization of the energy sector. Of the three, Argentina is the furthest from success.

Bolivia's political instability threatens its agricultural exports the most. These exports are generated almost exclusively in the lowlands. One part of Morales' constitutional changes would launch a land reform. That would break up the large farms of the lowlands and redistribute the land to the indigenous population in small plots, a process that would likely eliminate most exports.